Definition
Evening Star is the bearish counterpart to Morning Star. It consists of a long bullish candle, a small-bodied star that gaps up, and a long bearish candle that closes into the first candle's body. Signals distribution and potential top.
Formula
Day 1: Long bullish; Day 2: Small body gaps up; Day 3: Long bearish closing into Day 1
Example
Day 1: Strong green candle to $55. Day 2: Small doji at $56. Day 3: Strong red candle closing at $52. This pattern warns of a top.
FAQ
What is Evening Star Pattern?
A three-candle bearish reversal pattern signaling the end of an uptrend.
How do you calculate Evening Star Pattern?
A common formula for Evening Star Pattern is: Day 1: Long bullish; Day 2: Small body gaps up; Day 3: Long bearish closing into Day 1
Why is Evening Star Pattern important?
Evening Star Pattern helps investors evaluate candlestick patterns and make more informed decisions.